Dividend Stocks
Stocks that provide dividends are an excellent way to build long-term wealth. Not only do dividends provide investors with regular income, but dividend stocks can also help investors weather market volatility. How? Whether the markets are going up, down, or sideways, dividends provide investors with a steady income stream.
Having said that, while dividends are usually paid out quarterly, at the discretion of the company’s board of directors, they can be raised, cut, or eliminated.
Not all dividend stocks are created equal. As a result, there are a number of factors investors need to consider when looking at dividend stocks.
Dividend yield is one of the most important factors to consider when investing in dividend stocks. It might be tempting to just invest in a stock with the highest dividend yield, but there is a risk/reward trade off when it comes to dividend-yielding stocks—the higher the yield, the greater the risk.
Stocks that provide an annual dividend of 10% or more tend to be very risky. Because they are risky, there is a greater chance the dividend could be cut—or worse, the share price could plummet. This means investors lose out on dividend growth and capital appreciation.
History is another important factor to consider. Look for stable companies that have a long history (five, 10, or even 25+ years) of both paying an annual dividend and increasing that dividend annually. Those stocks that offer annual dividend growth as part of their corporate culture are more likely to continue that trend.
The best way to determine whether or not a company can continue to provide an annual dividend and raise its yield is to look at the company’s free cash flow. Free cash flow is the amount of free cash, or money left over after it pays for operations and necessary capital expenditures. The more money a company has in the bank, the greater the chances are that it can sustain or increase its high dividend yield.
14.9%-Yield Hawaiian Electric Industries Stock on 53-Year Dividend Streak
HE Stock Has Compelling Risk/Reward Ratio When I search for high-yield dividend stocks, I like the ones that have appreciated in price and have raised their dividends. High yields, however, are often a result of share-price weakness. For contrarian income.
Ardagh Metal Packaging Stock: Overlooked 10.2%-Yielder Has 25%+ Upside
Why Investors Should Pay More Attention to AMBP Stock Some industries seem more interesting than others, and that can dictate what kind of attention a particular stock receives. That might be one of the reasons Ardagh Metal Packaging SA (NYSE:AMBP).
Top 5 Alternative Bank Stocks With High Income Potential in 2024
Top 5 Alternative Banks With Dividend Yields Up to 16% The average American doesn’t like the idea of high interest rates. After all, they make it more expensive to borrow money and service debt. But rising borrowing costs are what.
Top 5 REITs for Income Investors in 2024
Top 5 REITs With Dividend Yields Up to 18% Real estate investment trusts (REITs) took a thrashing in 2022 and much of 2023. Over that two-year period, the Federal Reserve raised its key lending rate 11 times, from a range.
Top 5 High-Yield Energy Stocks for 2024
Top Oil & Gas Plays With Dividend Yields Up to 23% There was a time when Organization of the Petroleum Exporting Countries (OPEC) members, particularly Saudi Arabia, controlled the world’s oil supply and prices. But record-high production from the U.S..
Cracker Barrel Stock: 7.1%-Yielder for Contrarian Investors
CBRL Stock’s Dividend Streak at 42 Years More than three years have passed since the COVID-19 pandemic crushed the restaurant industry. A common view during the height of the pandemic was that the government-mandated closures of restaurants would devastate the.
Dorchester Minerals Stock: 11.2%-Yielder Trading Near Record High, Outlook Is Robust
Why DMLP Stock Has Risen in 2023 The crude oil market is volatile, with prices hinging on supply/demand metrics, economic conditions, and how the Organization of the Petroleum Exporting Countries Plus (OPEC+) is feeling at any given point. However, thanks.
OUTFRONT Media Stock: Overlooked 9.6%-Yielder Has 45% Upside
Why OUT Stock Has Been Rising (& Could Keep Rising) OUTFRONT Media Inc (NYSE:OUT) is a real estate investment trust (REIT) that has faced the same kinds of headwinds that other REITs have: in particular, rising interest rates. Higher interest.
20.7%-Yield Office Properties Income Trust Stock Has 172% Upside
Why OPI Stock Has Huge Potential The outlook for real estate investment trusts (REITs) like Office Properties Income Trust (NASDAQ:OPI) has recently taken a bullish turn. Since March 2022, the Federal Reserve has raised interest rates 11 times. That was.
3.1%-Yield NextEra Energy Stock Has Significant Upside
NEE Stock’s Dividends Hiked for 28 Straight Years While I generally look for dividend stocks with yields above five percent, I sometimes consider stocks with lower yields but significant potential in terms of share-price gains. That’s the case with NextEra.
